Update on EU ETS

Monday December 3, 2018

The Government has directed the Environment Agency (EA) to proceed with preparations for the next phase of emissions trading which will operate from 2021 – 2030. Due to ongoing Brexit negotiations the full detail of the future scheme is not yet known. However, one thing we do know is that NIMs will take effect from January.

In preparation for future reporting, the EA has notified participants in EU Emissions Trading Scheme (ETS) Phase 3 that the data collection exercise, National Implementation Measures (NIMs), will take place between January 2019 and September 2019.


What is the EU ETS?

The European Union Emissions Trading Scheme started in 2005 and is the world’s largest carbon-trading scheme. It was introduced to help the EU meet its targets under the Kyoto Protocol which stipulates an 8% reduction in greenhouse gas emissions from 1990 levels. Organisations that meet the qualification criteria – typically large combustion sector and manufacturing processes – are obligated to take part.

The scheme works on a ‘cap and trade’ basis, so there is a ‘cap’ or limit set on the total greenhouse gas emissions allowed by all participants. This cap is converted into tradable emission allowances and provides an incentive for installations to reduce their carbon emissions, giving them the opportunity to sell their surplus allowances.

Participants in the carbon market are allocated traded emissions allowances via a mixture of free allocation and auctions. For each one allowance, the holder has the right to emit one tonne of CO2 (or its equivalent). Those covered by the EU ETS must monitor and report their emissions each year and surrender enough allowances to cover their annual emissions.


What are NIMs?

There is a requirement to benchmark participants in the ETS to ensure a fair and equitable distribution of free carbon allowances. The NIMs is a method of benchmarking the emissions of participating installations.

The NIMs data collection requires gathering energy or production data over four years (2014 – 2018), which must be collated, verified by an approved body, and submitted by 31 May 2019.


EIC is here to help

We’re experienced in managing EU ETS compliance across a broad range of sites and industries. We’ve also worked with the Environment Agency in the delivery of legislative compliance across all carbon schemes and systems, including ESOS.

We can assist with your EU ETS and NIMs requirements; we’ll review the data held on record and complete the necessary submission to your appointed verifier and the verified data to the Environment Agency. We would also deal with any correspondence between the verifier, Environment Agency, and your organisation.

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